Poseidon Med IIGeorge Polychroniou

Poseidon Med II - Project Manager

Executive Director

Strategy, Business Development, Administration & IT

DEPA – Public Gas Corporation S.A.

LNG: The meeting point for Marine Transport & Energy sectors in CyprusLimassol Cyprus

September 29, 2017

I. LNG as Marine Fuel

II. Poseidon Med II project

III.LNG in Cyprus

Content

I. LNG as Marine Fuel

II. Poseidon Med II project

III.LNG in Cyprus

4

International regulation on the emission control

…in ECA have use fuel oil with a sulphurcontent of no more than 0.10% since

1 January 2015.

…outside (ECA), the current limit for sulphur content of fuel oil is 3.50%,

falling to 0.50% m/m on after 1 January 2020

Ships trading…

5

Alternatives based on MARPOL Annex VI

MARPOL - Annex VI

• Recent decision of IMO/MEPC will speed up developments

• LNG competition with Low Sulphur Bunker Fuels and EGCS (scrubbers) but:

Competition depends on oil price level and LNG decoupling

LNG can offer compliance with potential future environmental regulation

(NOx, PM, COx)

Conversion Investments payback often < 5 years

LNG could be the most beneficial option for:

− Smaller vessels

− New builds

− Vessels operating on fixed routes (e.g. Container vessels, Ferries,

Cruise ships)

• Other issues also matter (safety, reliability)

6

LNG as marine fuel

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LNG fuelled Vessels

Excluding LNG carriers & inland waterway vessels

Source: DNV-GL, May 2017

There are currently 221 confirmed LNG ship fuel projects

1 1 3 3 3 4 8 9 15 21 25 35 4556

7597 106

34

73

98 108 110 113 113 115

10

50

100

150

200

250

Axi

s Ti

tle

Ships in operation Ships on order

106 LNG fuelled ships in operation worldwide today

115 confirmed LNG fuelled newbuilds in 2024

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LNG fuelled ships cover large area

The heat map is based on the LNG fuelled fleet’s AIS positions from 15.05.2017 – 25.05.2017

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LNG Demand for Bunkering

Different views often diverging.Drivers that could speed up the

demand:

New environmental regulations

Availability and cost of ownership for other bunker fuels

Optimization of the SSLNG supply chain

1

2

3

LNG Consumption as a bunker fuel

Source: Forecasting the future of Marine fuel, BCG, 2015

263 252 210155 116

23143

191 237

7

86

174

0

100

200

300

400

500

600

2014 2015 2020 2025 2030

Shipping Industry

Conventional HFO cleaned by scrubbers LNG

Tons (millions)

I. LNG as Marine Fuel

II.Poseidon Med II project

III.LNG in Cyprus

11

LNG at Ports

Piraeus

Patra

Heraklion

Igoumenitsa

Limassol

Venice

3 Countries

6 Ports

Greece

Italy

Cyprus

Duration: Jun.2015 – Dec.2020

Budget: ~€53M

Coordinator: DEPA

Technical Coordinator:

DESFA

Partenrs: 26

Co-financed: 50% by EU - CEFConnecting EuropeFacility

0

12

Partners

13

Activities

01Studies for Ports

02Designs of Vessels

03Regulation

04Financial

Synergies

Infrastructure at Revithoussa LNG terminal -

LNG infrastructure at 5 ports -

- Financial assessment

- Financial tools for investments Adaptation of regulatory framework -

Environmental impact assessment -

- LNG fuelled vessels (newbuilds & retrofit)

- LNG bunkering and feeder

I. LNG as Marine Fuel

II. Poseidon Med II project

III.LNG in Cyprus

15

Need for Synergies

LNG as marine fuel Road transport sector

Off grid areas individual/remote consumers,

potential distribution companies

Power Generation Plants Vasilikos power plant/ Greek Aegean islands

LimassolVassilikos

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LNG in Cyprus

LNG to be transferred from FSRU in Vassilikos…

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